“ the Big brother “ has reached Uoll - strit
SEC will strengthen control over investors
the Commission on securities and stock exchanges of the USA (SEC) continues the approach to the companies using difficult economic - mathematical models for high-frequency trade in securities (a kind of exchange trade at which thousand transactions occur to securities for a second). For convenience of tracing of similar transactions in the market the regulator intends to assign to each participant special identification number.
according to Wall Street Journal, SEC counts that this measure will essentially facilitate check of market transactions of the given type. Frequently the traders using difficult computer programs, based on the technical analysis, earn on great volume of the transactions made within the limits of one trading session. By some estimations, for similar ways of trade it is necessary about two thirds of all volume of trade in securities in the USA. Liquidity in the exchange market of derivative financial tools almost is completely given by the similar companies.
for today for tracing of such transactions the authorities should address in the clearing centres and to verify operations with balance of the companies that is the extremely inefficient and zatratnym in the way of control. It is supposed that special identification numbers can receive and the other institutional investors who are not using robotised systems for trade by securities. The information on transactions will be accessible to the authorities after days after their fulfilment.
the given initiative most likely will be positively apprehended by the large companies, and without that obliged in detail to report to the authorities about the trading operations. Censures here can arise only at the small-scale business, trying to hide the investment strategy and models. “ for a market regulator it is the extremely important to have access to trading operations of all participants of the market, and the companies which are engaged in high-frequency trade, not an exception. Besides on them the increasing part from day volume of the auctions is necessary, - expert Economist Intelligence Unit Stephen Lesli has told daily. - If the new initiative will allow the authorities to save forces and time for checks such system should be realised in the near future. All objections of the companies about disclosure of investment strategy in this case nonsense: SEC never was an information leakage source “.
it is necessary to notice that a side benefit at high-frequency trade is direct access of participants to the exchange auctions. Having all advantages of the broker, but formally without being that, the companies benefit by possibility to buy and sell a paper seconds earlier, than other players. Similar practice has already been recognised SEC by dishonest and can be soon forbidden.